Carbon Price Flaw? The impact of the UK’s CO2 price support on the EU ETS

This 2025 edition of the Global Carbon Accounts presents a landscape of carbon pricing instruments through the lens of their current and potential contribution to scale up climate and development finance, as key discussions at the international level on the matter are taking place this year – notably in the context of the climate negotiations on the ‘Baku to Belem Roadmap to 1.3T’* and the Fourth Finance for Development Conference (FFD4). Several jurisdictions are already using carbon revenues to support a range of policy objectives, including decarbonization efforts and support for economic actors most affected by the transition. Yet there is still potential for them to further contribute to fill the gap.

In a challenging geo-political context, Europe has a window of opportunity to lead on both climate action and industrial competitiveness. As Mario Draghi highlighted in his report last year, this can only happen if decarbonisation ambitions are backed by real investment – and there is an urgent need to boost those investment. The European Commission followed suit and pledged to be an “Investment Commission,” while reaffirming its commitment to implement the 2030 emission reduction targets and to stay to course on the longer-term targets.